Hi Teodor,
It would seem that your thoughts on restoration are much like mine. Repair/replace what is missing/broken and remove any rust or corrosion to prevent further deterioration. I have seen old pieces ruined by over restoring. These pieces afterall are relics of a bygone era and should (in my opinion) reflect that.
Nothing wrong with your pics and they are certainly MUCH better than those of the original listing!
That wave pattern is also familiar to me but I can't place it either. It does not appear to be Omani though. None of my Omani Khanjar have this pattern, nor do any of them have brass scabbards.
I vote for Indian origin.
Regards Stu